Annual Report 2011 - Goodbaby International Holdings Limited

The key elements of the Group’s internal control
system include the following:
• An organizational structure with clearly
defined and distinct lines of authority and
control responsibilities
• A comprehensive financial accounting system
to provide for performance measurement
indicators and to ensure compliance with
relevant rules
• Annual plans prepared by senior
management on financial reporting,
operations and compliance with reference to
potential significant risks
• Strict prohibition of unauthorized
expenditures and release of confidential
information
• Specific approval from executive Director or
responsible senior executive prior to
commitment in all material matters
• Appropriate policy to ensure the adequacy of
resources, qualifications and experience of
staff of the Group’s accounting and financial
reporting function, and their training
programmes and budget
• Review and evaluation of the control process
and monitoring of any risk factors on a
regular basis by the management; and report
by the same to the Audit Committee on any
findings and measures to address the
variances and identified risks.
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AUDIT COMMITTEE
The Audit Committee comprises three
independent non-executive Directors, namely, Mr.
Iain Ferguson BRUCE (chairman), Mr. LONG
Yongtu and Mr. SHI Xiaoguang. None of the
members of the Audit Committee is a former
partner of the Company’s existing external
auditors.
The main duties of the Audit Committee include
the following:
• Review of the financial information of the
Group
• Review of the relationship with and the terms
of appointment of the external auditors
• Review of the Company’s financial reporting
system, internal control system and risk
management system
The Audit Committee oversees the internal
control system of the Group, reports to the Board
on any material issues, and makes
recommendations to the Board.
During the year under review, the Audit
Committee reviewed the Group’s annual results
and annual report for the year ended 31
December 2011, the financial reporting and
compliance procedures, the report of the internal
auditor on the Company’s internal control and
risk management systems and processes, and the
re-appointment of the external auditors.